As 2011 draws to a close, BridgeNet Solutions continues to work hard to develop plans that generate new savings for its clients. The past year was a memorable one for a number of reasons, including the celebration of BridgeNet's 10th anniversary, but it might also be remembered as a year of significant changes within the shipping industry, and a stepping stone to the changes that are on the horizon.Looking Back
2011 saw carriers trend towards providing the deeper incentive rates their clients have been requesting, offset by waivers of guaranteed service refunds and fewer agreements including fuel surcharge rate caps. We have also seen an increase in the use of quarterly rebates and deferred tier incentives when shippers agree to higher base rates. We've also seen customers with the largest volume of shipments begin catering to the major carriers' weight capacities, and greater incentives being offered in correlation to the carriers' increase in profit margins. Conversely, if you signed any new agreements in 2011, you may have noticed a second set of published rates called "standard rates," which were roughly 6%-30% higher than the carriers' daily rates and which varied by service level. Last but not least, early termination clauses became a popular means of deterring clients from shopping for better rates before contracts expired.
Looking Ahead
As for 2012, as usual, we can expect general rate increases. Express and air rates are projected to go up, as are ground rates. The increases should be mitigated, however slightly, by reductions in the fuel index. Both UPS and FedEx are looking to expand their operations or are already engaged in the process. UPS recently opened dedicated Health Care Sector distribution centers in Burlington, CA, Venlo, NL, and Singapore. FedEx is looking to expand its intra-country capabilities in the European Union.
How will these changes impact you? To keep your company competitive, you might be forced to consider alternative supply chain options, including utilizing regional carriers. More and more companies are utilizing regional carriers either in place of national carriers or as a way to supplement national carriers' services. Barring certain limitations, regional carriers provide lower and more simplified rate structures as well as fewer add-on charges.
No matter what your supply chain savings goals are for 2012, we are confident that BridgeNet can help. For more information on our solutions, including Xonar, Logistics Expense Analysis, and Carrier Exceptions Management, e-mail us at info@bridgenetsolutions.com or call 312-492-7500 and ask to speak with a BridgeNet sales representative. We've been here for you for the past 10 years, and will continue to be of service to our current clients and new clients in 2012.
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